Author

Date of Submission

Spring 2015

Academic Programs and Concentrations

Economics

Project Advisor 1

James Felkerson

Abstract/Artist's Statement

This essay is an analytical review of the development of Money, as the Austrian School of Economics scholar Ludwig Von Mises has summarized it, and cryptocurrencies as it appears in our modern world. In the essay, I will explain the roots of money’s creation and its establishment as a tool to successfully accomplish the various functions required of modern money. Using other relevant Austrian Economists, I will develop the idea of money and the roles that are required in order to be an efficient medium of exchange. Based on these requirements necessary in the creation of, or arrival on, a money, I will continue by explaining how Bitcoin and other cryptocurrencies have the ability to facilitate these requirements in a fashion that produces a reduction in the transaction and social costs incurred by economic agents and improve the efficiency of markets. Before providing my analysis on how cryptocurrencies provide a viable option to reduce costs associated with transactions and society, I will provide a summary of the major components of Bitcoin as a method for understanding the characteristics and operation of Cryptocurrencies currently in circulation and after. In my essay, I aim to provide clarity on the objective of cryptocurency’s existence and provide positive insight for the potential transaction and social cost reductions and market efficacy improvements.

Open Access Agreement

On-Campus only

Creative Commons License

Recommended Citation

Potashnik, Alexander, "The Virtual Medium of Exchange; The Potential Benefits of Cryptocurrencies in the Reduction of Social and Transactional Costs and the Subjectivist Approach to Money" (2015). Senior Projects Spring 2015. 317.
http://digitalcommons.bard.edu/senproj_s2015/317